ALLEGED DEBTOR’S RESPONSE TO PETITIONING
CREDITORS’ MOTION FOR SUMMARY JUDGMENT - Page 1
Alan L. Busch
Busch, Ruotolo & Simpson, LLP
100 Crescent Court, Suite 250
Dallas, Texas 75201
Telephone: (214) 855-2880
Facsimile: (214) 855-2871
E-mail: busch@buschllp.com
Mark Stromberg
State Bar No. 19408830
STROMBERG STOCK, PLLC
Two Lincoln Centre
5420 LBJ Freeway, Suite 300
Dallas, Texas 75240
Telephone 972/458-5335
Facsimile 972/770-2156
E-mail: mark@strombergstock.com
Attorneys for Jeffrey Baron, Alleged Debtor
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
IN RE: §
§
JEFFREY BARON, § Bankr. No. 12-37921-SGJ
§
Alleged Debtor. § Hearing: Feb. 13, 2013 @ 1:30 p.m.
____________________________________________________________________________________________
ALLEGED DEBTOR’S RESPONSE TO PETITIONING
CREDITORS’ MOTION FOR SUMMARY JUDGMENT
Comes now, JEFFREY BARON, the Alleged Debtor (“Baron”) who files this his
Response to the Petitioning Creditors’ Motion for Summary Judgment (the “Motion”), and in
response shows as follows:
SUMMARY OF THE RESPONSE
The petitioning creditors have the burden not merely to establish the existence of their
claims but must also to establish “a prima facie case that no bona fide dispute exists
” as to
the validity or amount of their claims. Matter of Sims, 994 F.2d 210, 221 (5th Cir. 1993). The
grounds offered by the petitioners to establish a prima facie case that no bona fide dispute exists
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exhibitsticker.com
EXHIBIT
6
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as to their claims is the District Court’s May 18, 2011 order.
The petitioning creditors assert that the order is unstayed and adjudicates Baron’s liability
for their claims. The petitioning creditors further claim that a full evidentiary hearing was held
on April 28, 2011, which included the live testimony of a number of attorneys. Further, the
petitioning creditors assert that the motion granted by the district court was fully litigated, and
that the alleged debtor invoked his Fifth Amendment rights against self-incrimination at the
hearing.
However, Baron will prove that: (1) the district court order relied upon by the petitioning
creditors has been stayed and as a matter of law the petitioning creditors’ claims are subject to a
bona fide dispute; (2) res judicata does not bar Baron’s bona fide disputes as to the Petitioning
Creditors’ claims because no final determination was made of either the liability or amount of
the claims against Baron; (3) collateral estoppel does not bar Baron’s bona fide disputes as to the
Petitioning Creditors’ claims because the “facts” determined were not essential to the order, and
because the order was not fully and fairly litigated; (4) in addition to the Motion exceeding the
scope of this Court’s January 17, 2013 orders by attempting to address insolvency, there are fact
issues on this question for which Baron is entitled to due process, including discovery. For these
reasons, the Motion should be, in all respects, denied.
PROCEDURAL HISTORY
Although the procedural history of the litigation involving Baron is voluminous, the
portions relevant to the Petitioning Creditors’ summary judgment motion on preclusion,
consisting primarily of orders from the District Court in Netsphere, Inc., et al. v. Jeffrey Baron,
et al., Civil Action No. 3:09-CV-0988-F (“the District Court Case”), the Fifth Circuit Court of
Appeals in Netsphere, Inc., et al. v. Jeffrey Baron, Appeal No. 10-11202 (“the Appeal”), and this
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Court in In re Ondova Limited Company, Bankr. No. 09-34784-SGJ-11 (“the Ondova
Bankruptcy Case”) is somewhat more simple, and will be all that is cited herein. The logical
beginning is Petitioning Creditors’ Exhibit J-2, Judge Royal Ferguson’s findings, conclusions
and order dated May 18, 2011 in the District Court Case, Docket No. 575 (“the Claims
Resolution Order”).
The Claims Resolution Order
In the Claims Resolution Order, coming as it did in regards to the Receiver’s Fourth
Motion for Order Approving Assessment and Disbursement of Former Attorney Claims [Docket
No. 562] (“the Fourth Motion”), Judge Ferguson stated that one of his goals was to “resolve” the
claims of Baron’s former attorneys. Id. at p. 3, ¶3. Judge Ferguson acknowledged that the
Fourth Motion he was then considering proposed “a settlement and compromise of the Former
Attorney Claims” id. at p. 5, ¶7, that his consideration was “summary” in nature, id. at pp. 6-7,
¶11, that the Receiver had the right to waive Baron’s otherwise extant right to a jury trial, id. at
pp. 9-11, ¶¶16-20, and that the Receiver was not required to collect or offer evidence or make
arguments to controvert the Former Attorney Claims,” referred to as “the Defense Obligation.”
Id. at p. 5, ¶8.
Thus, the District Court, through the Claims Resolution Order, established a voluntary
procedure in which Baron’s Former Attorneys could elect to voluntarily compromise their claims
for a fixed amount, “waive” alleged claims against Baron in excess of amounts suggested by the
District Court, and be paid by the Receiver. Id. at pp. 20-22, ¶¶35-37. Critically, however, the
District Court also acknowledged that it was not making any determination of “the Baron
Claims,” consisting loosely of “legal malpractice and other civil claims.” Id. at p. 21, ¶36.
Judge Ferguson went on to state, “Through this Order, Baron maintains any and all rights to
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bring, after the end of the Receivership, the Baron Claims,” id. at pp. 22, ¶36, holding that then
the restrictions imposed by any waiver of other rights as a result of their compromises to be paid
by the Receiver would be lifted. Id.
Apart from the clearly non-determinative language of Judge Ferguson’s ruling in the
Claims Resolution Order, after it was entered, it does not appear that the District Court treated
this order as a “final judgment” on the Former Baron Attorney claims for FRCP Rule 54(a)
purposes. There was no “judgment” entered; there was no final disposition of any of the claims -
- referring both to those of Baron expressly reserved in the Order and to those being
“compromised” by the Former Baron Attorneys; there was no “severance” of the claims of the
Former Baron Attorneys; and the mandatory procedure for certification of fewer that all claims
or all parties for finality in FRCP Rule 54(b) was not followed.
1
Perhaps most critically,
however, the Claims Resolution Order to pay the claims was stayed by Judge Ferguson.
2
The District Court’s Stay Order
The next order from Judge Ferguson pertinent to this Motion was his order on the
Receiver’s “Motion to Clarify Instruction to Receiver on Payments to Former Baron Attorneys,”
Docket No. 980. In response, and seeking “to preserve the status quo for appeal,” on June 18,
2012, Judge Ferguson entered his “Order Regarding Motion to Clarify Instruction to Receiver on
Payments to Former Baron Attorneys,” Docket No. 987 (see Baron Exhibit D-1, hereafter
referred to as the “Stay Order”). In the Stay Order, at p. 3, Judge Ferguson acknowledged that
“one of the appeals of Receivership Orders deals with the Court’s decision regarding [the Former
1
Rule 54(b) states that unless the Court “expressly determines that there is no just reason for delay,” any order
adjudicating fewer than all claims or all parties “does not end the action as to any of the claims or parties and may be
revised at any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and
liabilities.”
2
Although Judge Ferguson did not use the word “stay,” under well-established Fifth Circuit authority, Docket No.
987 constitutes a stay and suspended the designated proceedings of the Receiver under prior orders to pay
compromised claims. Tesfamichael v. Gonzales, 411 F.3d 169 (5th Cir. 2005).
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Baron Attorneys’ fee] claims, [and] Baron should be able to contest the decision before funds are
distributed.” Id. at p. 3. Thus, Judge Ferguson held:
“Accordingly, it is ORDERED that no funds be distributed to the former
Baron attorneys until the completion of the Appeal. Those funds now
available will be segregated and set aside by the Receiver until a decision is
made by the Court of Appeals.”
Id. As clarified by the Court of Appeals’ order dated December 31, 2012, holding that “district
court orders that were in place prior to the release of our opinion remain in place” (see
Petitioning Creditors Exhibit J-6, p. 1), the Stay Order represents the status quo as of the filing of
the involuntary petition against Baron.
The Court of Appeals Reversal of the Receivership Order
In the Appeal, on December 18, 2012, the Court of Appeals set aside the appointment of
the Receiver, and with it, Judge Ferguson’s rulings, including the Claims Resolution Order and,
with it, the voluntary resolution procedure Judge Ferguson had imposed. See Petitioning
Creditors’ Exhibit J-5 (hereafter, “J-5”) As a critical rationale for its ruling that imposition of the
Receivership was an abuse of discretion, the Court of Appeals repeatedly and unambiguously
went to pains to recognize that what made it so was the seizure of Baron’s assets using the
Receivership to satisfy unsecured and not-yet-determined claims.
Baron’s former attorneys were free to make claims against the bankruptcy estate,
many had done so. Alternatively, to the extent that they represented Baron or his
companies in matters unrelated to the Ondova bankruptcy, the attorneys could file
suit in a court of appropriate jurisdiction to collect the fees owed, which many had
done. Establishing a receivership to secure a pool of assets to pay Baron’s former
attorneys, who were unsecured contract creditors, was beyond the court’s authority.
. . . Moreover, for those unpaid attorneys who had filed claims, the claims had not
been reduced to judgment such that a receiver would have been proper to “set aside
allegedly fraudulent conveyances by [Baron].” (Citations omitted; emphasis
added.)
See J-5 at p. 18.
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Although the attorneys’ allegations and claims were delaying the district court and
bankruptcy proceedings, they were not the subject matter of the underlying
litigation. “The general federal rule of equity is that a court may not reach a
defendant’s assets unrelated to the underlying litigation and freeze them so that they
may be preserved to satisfy a potential money judgment.” (Citations omitted;
emphasis added.)
Id. at p. 19.
“[F]ederal courts in this country have traditionally applied the principle that courts
of equity will not, as a general matter, interfere with a debtor’s disposition of his
property at the instance of a nonjudgment creditor. (Citations omitted; emphasis
added.)
Id. at p. 20.
The case before us is similar to Grupo Mexicano to the extent that the receivership
remedy was for the purpose of controlling Baron’s transferring of funds that were to
be paid to attorneys – nonjudgment creditors. (Citations omitted; emphasis added.)
Id. at pp. 20-21. And finally,
The receivership ordered in this case encompassed all of Baron’s personal property,
none of which was sought in the Netsphere lawsuit or the Ondova bankruptcy other
than as a possible fund for paying the unsecured claims of Baron’s current and
former attorneys that had not been reduced to judgment. (Emphasis added.)
Id. at p. 21. If anything, the Court of Appeals has most plainly ruled that there was no binding
adjudication of the merits of the claims of the Former Baron Attorneys and, to the extent that
they seek preclusive effect from Judge Ferguson’s orders, the Petitioning Creditors. The Court
of Appeals also frequently made clear the point that the Receivership was used to seize Baron’s
personal assets, even though they were “unrelated to the underlying litigation,” even though they
“were not sought in the Netsphere lawsuit or the Ondova bankruptcy,” id., and even though there
was no evidence that assets that were in fact the subject of the litigation before the District Court
“were being moved beyond the reach of the court.” Id. at 16.
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The Court of Appeals’ Stay of the District Court’s Claims Resolution Order
After the Court of Appeals’ opinion reversing as improper the appointment of the
Receivership under which the still-stayed District Court order to enter into the voluntary
compromises of Former Baron Attorneys’ claims was handed down, the Court of Appeals
handed down a stay of its own. In Petitioning Creditors’ Exhibit J-6, the Court of Appeals
ordered a stay as follows: “The import of our order of November 9, 2012, has not changed,
which said this: ‘Disbursement of any other assets of the Receivership should be as limited as
possible until this Court resolves the appeals.’ We have resolved the appeals, but the only
expenditures should be those appropriate for the Receiver to make until relinquishment of
control of assets.” Id. at p. 7.
The Ondova Fee Enhancement Order
Last, counsel for the Petitioning Creditors, Mr. Pronske, cites an order from this Court in
the Ondova Bankruptcy Case entered on November 30, 2012, “Granting the Second Amended
Application of Pronske & Patel, P. C. for Payment of Fees as an Administrative Expense for a
Substantial Contribution to the Estate,” Docket No. 978 (Exhibit J-4). While this order is
certainly a final and non-appealable order, it is for counsel’s contribution to the Ondova
bankruptcy estate, and fails to make or include any determination of liability for all - - or any
part - - of those fees by Baron. Notably, also, it came just over two years from Mr. Pronske’s
withdrawal from representation of Baron. See Baron Exhibit D-4.
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate, when, viewing the evidence in the light most
favorable to the nonmoving party, the record reflects that no genuine issue of any material fact
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exists.
3
A “dispute about a material fact is ‘genuine’...if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.”
4
The district court must resolve all
reasonable doubts about the fact, and indulge all reasonable inferences from the evidence, in
favor of the non-movant.
5
The Petitioning Creditors ask this Court to hold that the Claims Resolution Order and the
Ondova Fee Enhancement Order have preclusive effect on Baron’s right to assert that the claims
of the Petitioning Creditors (against him) remain subject to bona fide dispute. Fundamentally,
there are two types of preclusion which could apply: claim preclusion (or res judicata) and issue
preclusion (or collateral estoppel). The standards for each are well-developed in the Fifth
Circuit.
Application of res judicata is proper only if the following criteria are met: (1) the parties
must be identical in the two suits; (2) the prior judgment must have been rendered by a court of
competent jurisdiction; (3) there must be a final judgment on the merits; and (4) the same cause
of action must be involved in both cases.
6
In particular, what constitutes a “final judgment” is
determined by reference to the Federal Rules of Civil Procedure and precedent. Rule 54(a)
defines a judgment as “any decree or order from which an appeal lies.” The Supreme Court has
held that a final judgment is a ruling or decree which conclusively determines the rights of the
3
Celotex Corp. v. Catrett, 477 U.S. 317, 322-324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty
Lobby, Inc.
, 477 U.S. 242, 248 (1986). See also Bridgmon v. Array Sys. Corp., 325 F.3d 572, 576 (5th Cir. 2003).
4
Sulzer Carbomedics, Inc. v. Oregon Cardio-Devices, Inc., 257 F.3d 449, 456 (5th Cir. 2001) (quoting Anderson,
477 U.S. at 248).
5
United States v. Diebold, Inc., 369 U.S. 654, 655 (1962); Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970);
St. Paul Guardian Ins. Co. v. Centrum GS, Ltd., 283 F.3d 709, 712 (5
th
Cir. 2002). See also, Hom v. Squire, 81 F.3d
969, 973 (10
th
Cir. 1996); Pocchia v. NYNEX Corp., 81 F.3d 275, 277 (2d Cir. 1996).
6
Matter of ARK-LA-TEX TIMBER CO., INC., No. 06-30105 (5
th
Cir. filed January 29, 2007) (citing Test Masters
Educ. Servs., Inc. v. Singh, 428 F.3d 559 (5
th
Cir. 2004)).
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parties, leaving nothing for the court to do but execute and enforce the judgment.
7
Rule 54(b)
makes plain that, unless the court express determines that there is no just reason for delay of an
appeal of an order adjudicating less than all claims of all parties, any such order does not end the
action.
8
Collateral estoppel will apply to bar relitigation of facts determined by a court when, in
the initial litigation: (1) the facts sought to be litigated were fully and fairly litigated; (2) those
facts determined were essential to the judgment; and (3) the parties were cast as adversaries.
9
This Court has also held that three “sub-factors” must also be considered: “‘(1) whether the
parties were fully heard; (2) whether the court supported its decision with a reasoned opinion;
and (3) whether the decision was subject to appeal or was in fact reviewed on appeal.”
10
ARGUMENTS AND AUTHORITIES
The factual grounds asserted by the petitioning creditors are not supported by the record
and are controverted by the summary judgment evidence.
A. The Stay of the Claims Resolution Order Gives Rise to a Bona Fide Dispute
The Claims Resolution Order relied upon by the petitioners was stayed by order of the
District Court, and later, upon reversal receivership, in the Court of Appeals. See Exhibits D-1
and Petitioning Creditors’ J-6 respectively.
7
Coopers & Lybrand v. Livesay, 437 U.S. 463, 467 (1978); Mowhawk Indus. v.Carpenter, 558 U.S. 100 (2009).
See also Meadowbriar Home for Children, Inc. v. Gunn, 81 F.3d 521, 528 (5
th
Cir. 1996).
8
See, e.g., iLOR, LLC v. Google, Inc., 550 F.3d 1067 (Fed. Cir. 2008) (holding that where the district court’s ruling
disposed of the plaintiff’s claims, but failed to address the defendant’s counterclaims, the judgment was not final).
9
Pace v. Bogalusa City Sch. Bd., 403 F.3d 272, 290 (5
th
Cir. 2005); Gupta v. Eastern Idaho Tumor Inst., Inc. (In re
Gupta), 394 F.3d 347, 351 (5
th
Cir. 2004). See also Copeland v. Merrill Lynch & Co., 47 F.3d 1415, 1423 (5
th
Cir.
1995) (holding that where the issue presented was not a “‘critical and necessary part’” of the prior judgment,
collateral estopped would not apply).
10
In re Henry S. Miller Commercial, LLC, 418 B.R. 912, 917 (Bankr. N. D. Tex. 2009), quoting State Farm Fire &
Cas. Co. v. Fullerton, 118 F.3d 374, 382 (5
th
Cir. 1997).
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The Fifth Circuit has defined a “stay” as “[a] stopping; the act of arresting a judicial
proceeding by the order of a court. Also, that which holds, restrains, or supports. A stay is a
suspension of the case or some designated proceedings within it. It is a kind of injunction with
which a court freezes its proceedings at a particular point.”
12
On June 18, 2012, the district court entered an order staying the order to pay the ‘former
attorneys’ as a compromise of their claims, pending appeal. Exhibit D-1. The district court
ordered that “no funds be distributed to the former Baron attorneys until the completion of the
appeal.” Exhibit D-1 at p. 3. Moreover, the district court expressly recognized that the claims
were subject to a dispute, and ordered that “Baron should be able to contest the decision before
funds are distributed.” Id. (emphasis added). Following the Court of Appeals ruling, the Court
of Appeals imposed a stay of its own, even while acknowledging that the status quo, and all prior
orders of the District Court (including its stay order above) remained in force.
It is well-established that where creditors possess a stayed order their claims are subject
to a bona fide dispute. The Fifth Circuit has affirmed the bankruptcy court holding that
“creditors possessed a stayed judgment. Accordingly, such claims were subject to a bona fide
dispute and lacked standing to institute an involuntary petition.” In re Norris, 183 B.R. 437, 453
(Bankr. W.D. La. 1995), aff’d, 114 F.3d 1182, 1997 WL 256808 (5th Cir. 1977). In affirming
the bankruptcy court’s opinion, the Fifth Circuit cited with approval the holding in In re
Raymark Industries, Inc., 99 B.R. 298 (Bankr. E.D. Pa. 1989). The court in Raymark Industries
held that “a creditor who holds a stayed judgment holds a claim which is subject to a bona
fide dispute, and hence, lacks standing to institute an involuntary bankruptcy case.” Id. at
299.
12
Tesfamichael v. Gonzales, supra at Footnote 2.
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In In re Henry S. Miller Commercial, LLC,
13
a recently-decided case with surprising
resonances cited by the Petitioning Creditors, this Court held that even an unstayed judgment
does not preclude inquiry into whether or not there is a bona fide dispute as to the validity or
amount of a claim, and that “objective circumstances that might give rise to a bona fide dispute
as to liability or amount” could still exist.
14
Several of the examples the Court gave in Miller of
such objective, “specialized” circumstances which would justify considering a dispute bona fide
- - even as to an unstayed judgment - - apply to this case, including:
a] a judgment entered against a non-party (seizure of assets not sought in
the Netsphere litigation or the Ondova bankruptcy);
b] “where subsequent events cast doubt upon the judgment’s
enforceability, such as . . . posting of a bond;” or
c] some sort of appellate holding [albeit in this case, rather than another
one] that . . . suggests it is inevitable that the . . . judgment will be
reversed.”
15
And while in In re Henry S. Miller Commercial, LLC centered on an “unstayed” judgment, that
which Petitioning Creditors claim as the judgment (which clearly is not a “judgment” in any
critical sense) was stayed both by the court that issued it, and also by the court that reversed it.
B. Res Judicata Does Not Bar Baron from Establishing a Bona Fide Dispute as to the
Claims of the Petitioning Creditors Since There Was No Final Determination
Res judicata does not bar Baron from urging that the claims of the Petitioning Creditors
are subject to bona fide dispute for multiple reasons, but most prominent among them is the
absence of a final judgment determining either the Petitioning Creditors’ claims or the defenses
and counterclaims of Baron.
13
Supra; cited at Footnote 10.
14
Id. at 921.
15
Id. at 921-22.
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No Decision on the Petitioning Creditors’ Claims. Indeed, even when one disregards
the effects of the various orders staying the effects of his Claims Resolution Orders, a careful
examination of Judge Ferguson’s Claims Resolution Order reflects not a single instance of an
actual judicial determination of the claims of the Petitioning Creditors. While Judge Ferguson’s
clever and well-intentioned procedures established a means by which Former Baron Attorneys
could either “take” or “leave” a compromise at a rate suggested by the District Court, none of the
Former Baron Attorneys had their claims “adjudicated” in any meaningful sense. A judicial
adjudication is not “optional”; rather, it is a decision by the court from which the options are
limited to either acceptance, or appeal. Judge Ferguson’s “ruling,” such as it was, only provided
an opt-in choice with payment of a lesser amount, plus certain benefits and protections and
waivers, for those who selected it.
Further, the District Court conditionally ordered the Receiver, not Baron, to pay the
claims with the payment to act as a compromise and settlement. Exhibit J-2 at pp. 20-22.
Unlike a corporation in receivership, an individual whose property is seized by a receiver does
not have privity with the receiver, and is not bound by the receiver’s obligations. See Booth v.
Clark, 58 US 322, 331 (1855) (“A receiver is an indifferent person between parties ... He is
appointed in behalf of all parties .. The money in his hands is in custodia legis for whoever can
make out a title to it. ... The receiver is but the creature of the court; he has no powers except
such as are conferred upon him” ); Temmer v. Denver Tramway Co., 18 F.2d 226, 230 (8th Cir.
1927) (“The receiver could neither speak for them [parties to the suit] nor bind them”). And,
recently, the Court of Appeals has negated those powers, ruling them to have been improperly
granted in the first instance. Thus, to the extent that any acts by the Receiver have impacted the
rights of Baron to pursue or allege bona fide disputes, the authority for those acts was improper,
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and any acts compromising Baron’s rights are now voided.
Turning to the Ondova Fee Enhancement Order,
16
while it establishes the
“enhancements” that services provided by Mr. Pronske conferred upon Ondova, it fails to
establish what amount of those “enhancements” (if any) were benefits to, or the liability of,
Baron. It could be said that res judicata principles would bar the assertion of any personal
liability which was, or could have been, joined with that determination, but at minimum, it
cannot be said that it establishes any liability of Baron.
No Decision on the Baron Claims. What can be said of Judge Ferguson’s lack of a
judicial determination of the Petitioning Creditors’ claims is even more explicit when it comes to
Baron’s bona fide disputes thereof. In the Claims Resolution Order, Judge Ferguson expressly
reserved Baron’s claims and defenses for Baron to choose to prosecute (or not) in the future.
17
And further, in the Stay Order, Judge Ferguson ruled that “one of the appeals of Receivership
Orders deals with the Court’s decision regarding [the Former Baron Attorneys’ fee] claims, [and]
Baron should be able to contest the decision before funds are distributed.” These hardly seem
like the words of a decision that decides or forecloses the existence of bona fide disputes; to the
contrary, they recognize the continuing vitality of the right to raise bona fide disputes. Those
claims comprising bona fide disputes cannot be said to have been precluded by the very “ruling”
which expressly reserves them for future decision.
16
Interestingly, the Claims Resolution Order suggested that the Pronske & Patel fee claim be reduced from
$241,912.70 to $177,352.70.
17
As just one example, breach of fiduciary duty is potentially a complete defense to the payment of the disputed
attorney’s fees, inasmuch as the common law remedy therefor is disgorgement of as much as all fees paid. “An
attorney’s compensation is for loyalty as well as services, and his failure to provide either impairs his right to
compensation.” Burrow v. Arce, 997 S.W.2d 229, 240 (Tex. 1999). Thus, Baron’s claims for breach of fiduciary
duty, pled as counterclaims and upon which a jury trial was demanded, give rise to a bona fide dispute as to the
amount and liability on the attorneys’ fees the petitioners are claiming. See Georgia Jewelers, Inc. v. Bulova Watch
Co., 302 F.2d 362, 369 (5th Cir. 1962) (counterclaims can reduce the number of creditors).
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C. Collateral Estoppel Does Not Bar Baron from Establishing a Bona Fide Dispute as
to the Claims of the Petitioning Creditors Since the Facts Determined Were Not
Essential to the Judgment, Since the District Court’s Order Was Appealed, and
Since the Issues Were Not Fully and Fairly Litigated
Taking off from the prior argument, wherein it was shown that the Claims Resolution
Order was not anything like conventional judicial decisionmaking which decides and either
grants or eliminates claims and defenses, it is also clear, as the Court of Appeals makes plain,
that the rulings culminating in the seizure of Baron’s assets and appointment of a Receiver were
in service of claims which were not the basis of the underlying dispute. Instead, the District
Court’s seizure of Baron’s assets to pay undetermined claims of attorneys against Baron - -
when the Court of Appeals found that Baron’s assets were “unrelated to the underlying
litigation,” and when those assets “were not sought in the Netsphere lawsuit or the Ondova
bankruptcy” - - was clearly not essential to an issue the District Court was required to determine,
which resulted in the reversal of the Claims Resolution Order as an abuse of discretion.
This also raises one of the “sub-issues;” inasmuch as the Claims Resolution Order on
which the Petitioning Creditors claims was allegedly based was not only appealed, but appealed
successfully, issue preclusive effect should not be accorded it. There is, of course, no collateral
estoppel effect that attaches to orders reversed on appeal.
18
Last, it appears there is good cause to question whether the rights of Baron were “fully
and fairly litigated” separate and apart from the appellate determination that the imposition of the
Receivership was an abuse of discretion. The order relied upon by the Petitioning Creditors was
granted without allowing Baron discovery, paid counsel, or several other elements due process.
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See Exhibit D-3. Orders granted without due process are void and have no legal effect.
19
The
Fifth Circuit has also ruled that a defendant should be afforded a fair opportunity to secure
counsel of his own choice.
20
And due process typically will also include a reasonable
opportunity to conduct discovery.
21
Finally, the hearing held April 28, 2011 included no live
testimony; it is well established that a party not “afforded notice and an opportunity to be heard
on the motion” has been denied the requirements of due process of law.
22
Baron was denied the
opportunity to be heard on how the district court’s finding as to the excessive, unreasonable fees,
should impact the Court’s granting of relief.
D. Baron Objects to Any Determination of the Claims of Insolvency on this Motion
Baron objects that the inclusion of the “insolvency” question in the Petitioning Creditors’
Motion is a direct violation of this Court’s January 17, 2013 order, which provides, in relevant
part, “ORDERED that the sole legal issue to be determined by the Court at Trial is whether the
claims of the petitioning creditors are subject to a bona fide dispute . . .”. (Emphasis added) The
inclusion of this issue in the Motion is thus improper, and given the seven days Baron had to
prepare, with no prior determination of his jurisdictional or pleadings motions and with no prior
discovery, this imposes an undue hardship on Baron and denies him his right to due process.
This denial of due process is all the more troubling (putting aside the improper seizure of his
personal assets through Receivership by the District Court) in a matter which, as this Court
pointed out in In re Henry S. Miller Commercial, LLC, evokes special policy concerns requiring
18
Angel v. Bullington, 330 U.S. 183, 208 n.15 (1947)(“If . . . a judgment has been vacated by the trial court or
reversed by an appellate court, it is no longer conclusive between the parties, either as a merger of the original cause
of action or as a bar to an action upon the original cause of action. . . .”.
19
Bass v. Hoagland, 172 F.2d 205, 209 (5th Cir. 1949) (“a judgment, whether in a civil or criminal case, reached
without due process of law is without jurisdiction and void.”)
20
Powell v. Alabama, 287 U.S. 45, 53 (1932); Texas Catastrophe Property Ins. Ass’n v. Morales, 975 F.2d 1178,
1180 (5th Cir. 1992) (“there is a constitutionally guaranteed right to retain hired
counsel in civil matters”).
21
Williamson v. Tucker, 645 F.2d 404, 414 (5th Cir. 1981) (“the district court must give the plaintiff an opportunity
for discovery and for a hearing that is appropriate to the nature of the motion”).
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protection for involuntary debtors.
23
Debtor has put forth evidence which raises an issue of fact
with regard to alleged insolvency and shows that many of his debts, including those of several of
the Petitioning Creditors, were paid as due until they became disputed. Nevertheless, in an
abundance of caution, if this Court will consider the insolvency issue, then Baron has
contemporaneously filed herewith a motion for continuance, which is incorporated in this portion
of the Response.
E. Analysis of the Fee Disputes Reveals Issues of Fact Precluding Judgment
Mr. Hall had a written contract, capping his fee at $10,000 per month and containing a
merger clause requiring any modification be in writing. Exhibit D-6. Mr. Hall admits being paid
in full
for 10 months, but alleges that in the 11th and last month Mr. Baron orally agreed to a
$5,000.00 fee increase. Exhibit P-H. Hall asserts a claim that Baron breached the written
contract by paying the amount specified in the written agreement, $10,000, as payment in the
eleventh month. Id.
In light of the written contract’s merger clause, Mr. Hall’s claim of an oral modification
increasing the fee by $5,000 for the last month is groundless as a matter of law. Mr. Hall has the
fiduciary duty to fully inform his client about the legal effect of his contract. E.g., Holland v.
Brown, 66 S.W.2d 1095, 1102 (Tex.Civ. App.-Beaumont 1933, writ ref’d) (duty to affirmatively
disclose all material facts that would affect their relationship as well as legal consequences of
those facts, and that breach of this duty states a claim for constructive fraud).
Moreover, an attorney’s attempt to increase the fee charged by modifying an existing
22
International Transactions v. Embotelladora Agral, 347 F.3d 589, 594, 596 (5th Cir. 2003).
23
Id. at 919; see also In re Staxxring, Inc., 2010 Bankr. LEXIS 1803 (Bankr. N. D. Tex. 2010; Jernigan, J.)
(holding, in dismissing a six creditor petition after eliminating all but two, “Congress has expressed an intent in
section 303 of the Bankruptcy Code that creditors with questionable claims ought not to be allowed to force
companies into bankruptcy, and in light of this policy, has put forth somewhat stringent standards in section
303(b)(1).”)
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contract is, as a matter of law, automatically subject to a bona fide dispute and is presumed
invalid. Archer v. Griffith, 390 S.W.2d 735, 739 (Tex. 1964)(“There is a presumption of
unfairness or invalidity attaching to the contract, and the burden of showing its fairness and
reasonableness is on the attorney”). If further response be necessary, Mr. Baron denies the oral
modification alleged by Mr. Hall. Exhibit D-7. Accordingly, Mr. Hall’s claim is clearly subject
to a bona fide dispute as to validity and amount.
Further, it is a violation of an attorney’s fiduciary duty to fail to reduce a fee agreement to
writing, where such a requirement could be reasonably expected by the client. Jackson Law
Office, P.C. v. Chappell, 37 S.W.3d 15, 22--23 (Tex.App.---Tyler 2000, pet. denied). Making
misrepresentations about the legal effect of an attorney’s contract, is also a violation of the
attorney’s fiduciary duty. Cantu v. Butron, 921 S.W.2d 344, 349--50 (Tex.App.---Corpus Christi
1996, writ denied).
Breach of fiduciary duty is a defense to the payment of the disputed attorney’s fees. This
is because as a matter of dispositive Texas law, “An attorney’s compensation is for loyalty as
well as services, and his failure to provide either impairs his right to compensation”. Burrow v.
Arce, 997 S.W.2d 229, 240 (Tex. 1999). Thus, Baron’s claims for breach of fiduciary duty, pled
as counter claims and upon which a jury trial has been demanded, if successful, defeat the
attorney’s right to compensation and thus independently constitute a bona fide dispute as to the
amount and liability on the attorneys’ fees the petitioners are claiming. See Georgia Jewelers,
Inc. v. Bulova Watch Co., 302 F.2d 362, 369 (5th Cir. 1962) (counterclaims can reduce the
number of creditors).
Mr. Lyon has failed to produce his written contract for review by this Court. Lyon’s
billing ‘invoices’ establish that he claims his fee increased from $40/hour to $300/hour as of
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September 2009. Exhibit P-D. Lyon’s claim is shown fictitious and subject to a bona fide
dispute by Lyon’s own email sent to other attorneys in October 2009, seeking more work
from Mr. Baron on the basis he was only charging Baron $40/hour and therefore provided
“more bang for the buck
”. Exhibit D-5 at page 2. Lyon’s own email clearly states and admits
that his billing rate was the $40.00 /hour he was paid, and not the $300/hour he now claims. Mr.
Lyon’s claim is clearly subject to a bona fide dispute as to validity and amount. If further
argument is necessary, Baron disputes the fees and testifies that Lyon settled his dispute in a
written accord and satisfaction that was paid on by Baron. Exhibit D 7. The fiduciary duty
violations discussed above, apply also to Mr. Lyon.
Mr. Taylor’s contract has a monthly fee cap, which Mr. Taylor admits he was paid in
full. Exhibit P-F. Mr. Taylor, however, claims that he is also entitled to a contingency fee.
Taylor’s claim is groundless as a matter of law as, according to Mr. Taylor, “no specific value
was ever negotiated that would be subject to the contingency-fee calculation.” Id. Since Taylor
admits he cannot show that he met the contingency conditions, as a matter of law there is a bona
fide dispute as to his claim for contingency fees.
There is no provision in Mr. Taylor’s contract allowing him to increase the hourly fee he
agreed to because no value was negotiated that would satisfy the conditions required for the
attorneys to be entitled to a contingency fee. After the case was fully settled, Taylor sent Jeff an
email confirming that the only remaining fee due was a small bill—with no mention of any claim
of any entitlement to any contingency fee. Exhibit D-7.
Notably, the lawsuit Taylor handled was for an asset owned by Jeff Baron’s Roth IRA.
Taylor’s principal client was the IRA with Jeff only involved through his beneficial interest.
Exhibit P-F. The IRA received no benefit
what-so-ever from the settlement. Exhibit D-7.
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Under the terms of the settlement, hundreds of thousands of dollars that the defendant had been
willing to pay prior to the settlement were lost, as were substantial revenue from the asset. Id.
Taylor’s right to be paid a contingency fee was expressly conditioned on an express
formula contained in the written contract. Exhibit P-F. Pursuant to the written formula in
Taylor’s contract, to satisfy the contingency condition Taylor must show that he obtain a
recovery greater
in value than the value of the domain name itself added to the hundreds of
thousands of dollars the defendant was willing to pay at the time Taylor was retained. Exhibits P-
F, D-7. Pursuant to the formula in Taylor’s contract, that value is deducted from any recovery in
computing the contingency fee that would be due.
Taylor lost the money offered by the defendant prior to Taylor’s litigation and Taylor
won nothing and has admitted that he can demonstrate no benefit to his client. Exhibit D-7.
Taylor admits he received a substantial fee for his work on an hourly basis, exactly as called for
in his written contract. Exhibit P-F. Taylor admits that he is seeking a sum of money not called
for in his written contract, but rather was computed in a way Taylor unilaterally invented and
which was not a term or provision of the written agreement. Id. Accordingly, the Taylor/Power’s
claim is clearly subject to a bona fide dispute as to validity and amount.
The fiduciary duty violations discussed above, apply also to Taylor/Powers. If further
argument is necessary, Baron disputes Taylor’s claim for additional fees. Exhibit D-7.
Mr. Ferguson’s claim is clearly subject to a bona fide dispute as to validity and amount.
Mr. Ferguson was paid in full under the terms of his written agreement letter attached to his
summary judgment evidence even though Ferguson has failed to produce any work reports
detailing his purported work hours to justify those fees. Exhibits P-C and D-7. For the period
prior to September, Ferguson admits he had an agreement and was paid under that contract.
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Exhibit P-C. Ferguson seeks to avoid the agreement- paid on in full (Baron’s payment for
Ferguson’s hotel and meal present a $107.00 dispute that Ferguson makes). There is no question
that, at a minimum, the written agreement for Ferguson’s work prior to September was
substantially performed by Mr. Baron and Ferguson was paid
. Id.
Ferguson seeks to avoid the agreed upon fee of his written contract by claiming Baron
failed to pay $107.00 or, allegedly paid ‘untimely’. Even if his claim were true, Ferguson,
accepted the payments. Having accepted payment based on a written fee arrangement, Ferguson
cannot demand a higher rate for that work. The fiduciary duty violations discussed above, apply
also to Mr. Ferguson.
Ferguson sent a letter, during the same period Ferguson claims to have been subject to
‘late payment’, and the letter does not mention any such events such as ‘late payment’.
Moreover, his own letter confirms that Ferguson will not charge for more than 10 hours work (at
$300/hour) for the period after September 1st (Ferguson admits that for the period prior to
September 1st, he was paid pursuant to his written agreement). Exhibits P-C and D-7. Ferguson
provides no work reports, which is another violation of his fiduciary duties, and in any event,
pursuant to his written agreement is limited to a maximum $3,000.00 fee unless he can produce
written authorization for working more hours. That fee would only be due if he can prove that
he worked 10 hours in September. Ferguson has produced no billing records to substantiate his
claim and Baron denies that Ferguson provided the work in September. Exhibit D-7. Again,
Ferguson has provided no evidence of his work and no billing reports. At most, Ferguson is
entitled to $3,000.00 based on his own letters, yet his claim is for over $70,000.00. His fee
demand is unconscionable and a violation of Ferguson’s ethical and fiduciary obligations. By
virtue of those violations, and by virtue of his excessive fee demand, Ferguson forfeits his right
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to payment, if any such right had existed.
Ferguson’s claim for fraud is legally meritless. Ferguson claims he was ‘defrauded’
because Baron told him that Baron would not pay his fee, but rather, the million dollar trust
would pay the fee. There is no materiality to the alleged ‘false representations’, which Baron
denies making. Exhibit D-7. If Baron promised to pay from his own pocket, or with money
funded from a multi-million dollar trust, the money is just as green.
Notably, no hourly work reports were provided to his client, nor attached to Ferguson’s
affidavit. Ferguson also appears to admit violating his fiduciary duties and committing
malpractice, as follows: According the Ferguson
, his client wanted to void an agreement but
against his client’s wishes (if Ferguson is to be believed) Ferguson got the agreement finalized
by non-appealable order. Exhibit P-C. Ironically, Ferguson feels perfectly free to try to avoid a
contract he entered into and was paid upon, but is proud that he-- according to him-- violated his
client’s wishes and instructions and locked his client into an agreement his client sought to void.
If further argument is necessary, Baron disputes Ferguson’s fees. Exhibit D-7.
Ms. Schurig now claims a debt from Mr. Baron of $93,731.79, but swears under oath
that she was paid over a million dollars in fees and that her claim against Mr. Baron is only for
$1,331.50. Exhibit P-B. The district court’s single factual finding made after the ‘hearing’ held
on April 28, 2011, was that the maximum reasonable fee for the work alleged to have been
preformed for Baron was $400.00 per hour. Exhibit D-2. Schurig’s billing to Baron includes
hourly work charged in excess of $400/hour. Exhibit P-B. The total excess charges over $400.00
per hour in her billing exceed the amount Schurig testified was due from Baron.
It is a breach of fiduciary duty charge an unreasonable fee, and is a defense to payment
that a fee requested is unreasonable. District Court’s order establishes that Schurig’s fees over
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$400/hour are unreasonable. When those unreasonable fees are removed from the billing, no
amount is due. The fiduciary duty violations discussed above, apply also to Ms. Schurig. If
further argument is necessary, Baron disputes Schurig’s fees. Exhibit D-7.
Further, Mr. Baron provided Ms. Schurig over $2 Million to hold in trust, which funds
have never been reasonably or rationally accounted for by Ms. Schurig. Exhibit D-7.
Notably, Baron does not own Asia Trust and no explanation in fact or law has been
offered as to why Jeff Baron would be liable under the law for their debt, if that debt were due.
Moreover, as a matter of Texas law, collection from Jeff for the debts of Asia Trust are barred by
the Statute of Frauds. Similarly, there has been no showing that the claimant law firm with
respect to the Schurig affidavit has any rights against Mr. Baron.
Mr. Garrey’s testimony is not credible, and is provably false. Accordingly, his claim is
clearly subject to a bona fide dispute as to validity and amount. Garrey swears that he was asked
by Jeff Baron to prepare and file a Special Appearance on behalf of The Village Trust in a
lawsuit pending in Dallas State District Court. Garrey swears that he performed all of these
tasks. As a matter of public record, no such special appearance exists. Moreover, Garrey’s
emails establish that contrary to his testimony, he solicited
the Village Trust to be retained to file
the special appearance and the Trust rejected his offer and did not retain him.
Garrey’s bitter reply email to the Village Trust confirmed that, directly contrary to his
affidavit testimony, he was NOT ASKED OR RETAINED TO PROVIDE ANY LEGAL
SERVICES FOR THE TRUST, AND HE PROVIDED NONE. Exhibit D-7.
Similarly, Garrey claims that he was retained by Mr. Baron to object to the fee requests
of the Receiver’s counsel, and asked to devise a strategy to remove the Receiver and the
Receiver’s counsel. Exhibit P-E. However, Mr. Garrey’s sworn testimony is that he stopped
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working for Baron prior to any motion to appoint the receiver and it is impossible
for Mr.
Garrey to have performed the services he claims. Garrey’s testimony is false.
Not only is Garrey’s factual account false, but when examined, Garrey’s affidavit
establishes that Mr. Baron’s alleged obligation
-- for three months and including a bonus--
totaled at most
only $375.00. Exhibit P-E at page 9. Notably, Garrey states he worked only for
two weeks, and clearly did not earn the full $375.00 his affidavit establishes is the amount that
would be due from Mr. Baron if Garrey had performed actual work, had done so for three
months, and had not forfeited his fee by violating the fiduciary duties he owed to his client.
The fiduciary duty violations discussed above, apply also to Mr. Garrey. His ‘lawsuit’
against Mr. Baron is a clear violation of his duty of loyalty and to maintain attorney-client
confidences, and not to fabricate false allegations against a former client. If further argument is
necessary, Baron disputes the fees. Exhibit D 7. Mr. Garrey’s claim is clearly subject to a bona
fide dispute as to validity and amount.
Mr. Pacione seeks payment for fees but provides only a ‘block’ report of the alleged
work he performed. Exhibit P-H. The written contract relied upon by Pacione is clear that his
work obligation -- and Mr. Baron’s payment obligation was to start in March, not January or
February. Pacione, however, claims fees for January and February.
In making his affidavit Pacione failed to provide the written terms for his January and
February work. Mr. Baron, however, has provided evidence of those terms. Exhibit D-7. The
work product for which Mr. Pacione was to be paid is clear and explicit, including specific
deadlines. Mr. Pacione, however, failed to perform and provided Mr. Baron no work product.
Exhibit D-7. Mr. Baron testifies that he asked Pacione to sign a contract. Id. Pacione’s failure
to do so before engaging in work is a violation of Pacione’s fiduciary duty to Mr. Baron. See
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Jackson Law Office, 37 S.W.3d at 22-23.
Baron testified that he offered to pay Pacione based on the work product he provided, for
example, a memorandum of law, but that Pacione produced no
work product. Mr. Pacione’s
claim is clearly subject to a bona fide dispute as to validity and amount. Pacione notably fails to
provide an hourly work report. The fiduciary duty violations discussed above, apply also to Mr.
Pacione. If further argument is necessary, Baron disputes the fees. Exhibit D 7.
Mr. Pronske certainly worked hard in the Ondova case and was awarded a substantial
contribution claim against Ondova for the same work he seeks to recover against Mr. Baron.
Exhibit P J-4. As Mr. Pronske is not entitled to a double payment for his work, any claim against
Baron for the same work is contingent
upon the disposition of the Ondova fee award.
Notably, Pronske admitted under oath the Mr. Baron did not
negotiate to pay his fee.
Exhibit P-A. Rather, Pronske testifies that he agreed to be paid by the Village Trust and
understood up front
that Mr. Baron would not be responsible for paying the fee. Id. Mr.
Pronske’s attempt to enforce his alleged fee thus violates Texas law including the Statute of
Frauds, and thus violates Pronske’s fiduciary duties to Mr. Baron.
Pronske admitted under oath that there are no engagement agreements relating to the
representation and that he did not expect Mr. Baron to pay for his services. Exhibit P-A. Pronske
claims that payment was to come from the Village Trust. Id. Pronske swears he received a
$75,000.00 initial retainer from the Village Trust. Id. Pronske has admitted under oath he was
to bill against that pre-paid retainer. Id. Despite his legal and fiduciary duties to do so, Pronske
failed to send monthly billing statements, failed to send monthly reports detailing the status of
the retainer, and failed to request a replenishment of the retainer. Id.; Exhibit D-7. Notably,
Pronske’s first billing statement was printed only in February 2011, a year after the work was
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performed. Exhibit P-A. Pronske forfeited his right to a fee by violating the fiduciary duties he
owed to Mr. Baron, by virtue of the forgoing, and as follows:
Pronske filed a motion accusing his own client of misconduct, and advocating against his
own client. Exhibit D-4. Pronske’s motion stated that “PronskePatel has recently learned that
Mr. Baron intends to transfer assets to an offshore entity over which U.S. Courts will not have
jurisdiction, in order to hide those assets from legitimate creditors”. Id. at page 2. Pronske’s
motion further states that “PronskePatel has recently learned that Baron intends to hide his assets
offshore as early as September 15, 2010. Thus, the hearing will need to move forward
expeditiously to prevent Mr. Baron’s unlawful activities.” Id. at page 3. (Baron disputes the
truth of Pronske’s allegations. Exhibit D-7.) It is undisputed that Pronske made the allegations
while representing Baron. Exhibit D-7.
Assuming what Pronske stated in his motion was true (Baron disputes this), that means
that Pronske was revealing client confidential information. Whether Pronske’s claim about
threatened moving of assets (by seeking to find a replacement trustee for the Village Trust, as
ordered by the Court,) were true or not, Pronske was placing his own personal interest (ability to
collect his fee), above his clients. As discussed below, that is a violation of his core duty of
loyalty.
The profession of law is unlike most other professions. The duty placed upon an attorney
to his client is one of a fiduciary. WHEN FACED WITH A CHOICE BETWEEN
PERSONAL LOSS AND CAUSING LOSS TO HIS CLIENT, AN ATTORNEY IS
BOUND BY LAW, TO PLACE HIS CLIENT’S INTERESTS FIRST. Pronske failed to do
this.
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It was a violation of Mr. Pronske’s fiduciary duties for Mr. Pronske to place his personal
interests over his client’s. Goffney v. Rabson, 56 S.W.3d 186, 193 (Tex.App.- Houston [14th
Dist.] 2001, pet. denied) (“placing personal interests over the client’s interests”);State v. Baker,
539 S.W.2d 367, 374 (Tex.Civ.App.—Austin, 1976, writ ref’d n.r.e.) (“Neither his personal
interests, the interest of other clients, nor the desires of third persons should be permitted to
dilute his loyalty to his client.”). It was a violation of Mr. Pronske’s fiduciary duties to Mr.
Baron for Mr. Pronske to act as an advocate against his client. Delta Air Lines, Inc. v. Cooke, 908
SW 2d 632, 633 ( Tex.App.-- Waco 1995) (“not act as advocate against a person the lawyer
represents”).
Mr. Pronske also violated his fiduciary duties to Mr. Baron by (1) failing to reduce his
fee agreement to writing, (2) failing to keep and provide on a timely basis a record of the
services rendered, (3) failing to provide timely billing statements, (4) threatening to withdraw on
short notice in an attempt to force a client to pay a disputed fee. See Jackson Law Office, P.C. v.
Chappell, 37 S.W.3d 15, 22--23 (Tex.App.---Tyler 2000, pet. denied). Further, Pronske violated
his ethical and fiduciary duty to his client by intentionally taking an action to prejudice and
damage his client during the course of their relationship. Prior to filing his motion, Pronske
threatened Mr. Baron that he would “Scorch the Earth” against him unless his newly demanded
fee was immediately paid. Exhibit D-7.
The other fiduciary duty violations previously discussed above, apply also to Mr.
Pronske. If further argument is necessary, Baron disputes Pronske’s fees. Exhibit D-7.
Notably, none of these issues were addressed in the determination of Pronske’s
administrative claim for substantial contribution in the Ondova case. In that case, Baron was
prohibited from litigating or contesting Pronske’s claim and the determination of the
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administrative claim did not determine any issues regarding Pronske’s contractual rights with
respect to Mr. Baron, nor Baron’s fiduciary duty claims with respect to Pronske. Exhibit D-7.
The substantial contribution claim allowance is based on the reasonableness of the fees with
respect to the benefit provided the Ondova estate, not with respect to the work provided for Mr.
Baron’s benefit. See e.g., Matter of Consolidated Bancshares, Inc., 785 F.2d 1249,1253 (5th Cir.
1986). Nevertheless, Pronske’s reliance on the substantial contribution award to allege a higher
claim against Mr. Baron than was provided for in the district court’s order, negates the
petitioning creditors’ argument that the district court’s order finally adjudicated the validity and
amount of the claims.
For further cause, should same be necessary, Mr. Pronske’s claim is clearly subject to a
bona fide dispute as the district court found
Pronske’s billing rate was unreasonable for the
work provided to Mr. Baron. Exhibit D-2. By charging his client excessive fees, Mr. Pronske
(like each of the claimants seeking excessive fees) violated his fiduciary duty to Mr. Baron,
giving rise to the forfeiture not just of the excessive portion of the fees, but to the attorney’s right
to fees entirely. See Braselton v. Nicolas & Morris, 557 S.W.2d 187 (Tex.Civ.App.– Corpus
Christi 1977)(“There exists, therefore, a lawfully imposed duty not to charge excessive fees.”);
Deutsch v. Hoover, Bax & Slovacek, L.L.P., 97 S.W.3d 179, 196 (Tex.App.Houston [14th Dist.]
2002, no pet.)(“Attorneys owe their clients a fiduciary duty of absolute perfect candor”); Murphy
v. Gruber, 241 S.W.3d 689 (Tex.App.– Dallas 2007) (excessive fee claim involves “the integrity
of their billing practices”); Burrow v. Arce, 997 S.W.2d at 240.
CONCLUSION
In determining the question of the standing of the petitioning creditors, and thus the
question of the Court’s jurisdiction to proceed in an involuntary bankruptcy, “The court’s
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objective is to ascertain whether a dispute that is bona fide exists; the court is not to actually
resolve the dispute.” In re Sims,
994 F.2d at 221. Accordingly, the court is not charged with
attempting to resolve the merits of the claims, but rather “to ascertain whether an objective legal
basis for the dispute exists.” Id.
The petitioning creditors carry the burden of first coming forward with the evidence, not
just to establish the existence of their claims, but also to put on a prima facie case that the claims
are not subject to a bona fide dispute. The ruling of the Fifth Circuit is clear, “[T]he petitioning
creditor must
establish a prima facie case that no bona fide dispute exists.” Id.
The grounds offered by the petitioning creditors to establish a prima facie case that no
bona fide dispute exists is their argument that the district court’s May 18, 2011 order is unstayed
and determined Baron’s liability for their claims. Contrary to the allegations of the petitioning
creditors, the district court’s May 18, 2011 order does not determine Mr. Baron’s liability for
their claims, and, in any case, was stayed by the district court and reversed by the opinion of the
Fifth Circuit.
As a matter of established law affirmed by the Fifth Circuit, “a creditor who holds a
stayed judgment holds a claim which is subject to a bona fide dispute, and hence, lacks
standing to institute an involuntary bankruptcy case”. In re Raymark Industries, 99 B.R. at
299; In re Norris, 183 B.R. at 453, affirmed
114 F.3d 1182, 1997 WL 256808 (5th Cir. 1997).
For the reasons set forth above, the Motion of the petitioning creditors should be, in all
things, denied and the case dismissed for want of jurisdiction.
Respectfully submitted,
STROMBERG STOCK, PLLC
By: /s/ Mark Stromberg
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Mark Stromberg
State Bar No.
19408830
CERTIFICATE OF SERVICE
I hereby certify that on February 8, 2013 a true and correct copy of the foregoing
document was sent by email to Lisa Lambert, Counsel for the United States Trustee; Gerrit
Pronske, Counsel for the Petitioning Creditors, was served upon all persons identified below by
regular mail, postage prepaid, and to all other persons requesting notices via the ECF system.
Gerrit M. Pronske Shurig, Jetel Beckett Tackett
PRONSKE & PATEL, P. C. 100 Congress Ave., Suite 5350
2200 Ross Ave., Suite 5350 Austin, Texas 78701
Dallas, Texas 75201 Email: mroberts@morganadler.com
Dean Ferguson Jeffrey Hall
4715 Breezy Point Drive 8150 N. Central Expy., Suite 1575
Kingwood, Texas 77345 Dallas, Texas 75206
Email: dwferg2003dm@yahoo.com
Email: jeff@powerstaylor.com
Gary G. Lyon David Pacione
The Willingham Law Firm Law Offices of Brian J. Judis
6401 W. Eldorado Parkway, Suite 203 700 N. Pearl St., Suite 425
McKinney, Texas 75070 Dallas, Texas 75201
Email: glyon.attorney@gmail.com
Email: david.pacione@CNA.com
Robert Garrey Sidney B. Chesnin
1201 Elm Street, Suite 5200 4841 Tremont, Suite 9
Dallas, Texas 75270 Dallas, Texas 75246
Email: bgarrey@gmail.com
Email: schesnin@hotmail.com
Darrell W. Cook and Stephen W. Davis Lisa L. Lambert and Nancy Resnick
Darrell W. Cook & Associates Office of the United States Trustee
One Meadows Building 1100 Commerce St., Room 976
5005 Greenville Ave., Suite 200 Dallas, Texas 75242
Dallas, Texas 75206 Email: lisa.l.lambert@usdoj.gov
Email: all@attorneycook.com Email: nancy.s.resnick@usdoj.gov
/s/ Mark Stromberg
Mark Stromberg
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AFFIDAVIT OF GARY SCHEPPS - Page 1
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., )
MANILA INDUSTRIES, INC., and )
MUNISH KRISHAN, )
Plaintiffs, )
)
vs. ) Civil Action No. 3-09CV0988-F
)
JEFFREY BARON, and )
ONDOVA LIMITED COMPANY, )
Defendants. )
DECLARATION OF GARY SCHEPPS
1. My name is Gary Schepps. I am the appellate counsel for Jeff Baron
and have been ordered by Judge Furgeson to act as trial counsel as well. I
am competent to make this declaration. The facts stated in this declaration
are within my personal knowledge and are true and correct. I have personal
knowledge of the stated facts, which I learned as the result of being
subjected to the facts and events stated herein.
2. I formally requested that the receiver produce the material as stated in
the exhibit attached to Jeff’s Response, and Amended Response to the
Assessment of Former Attorney Claims, previously filed in this cause. A
very limited amount of material was requested, including for example, all
fee agreements, all correspondence between the attorneys and their client
relating to the fee and specifically (1) a copy of the actual
billing sent to the
client, and (2) the correspondence sent by each attorney making any demand
for payment, and any return correspondence. The receiver agreed to produce
this material in the format requested (OCR’d tabbed PDF files) and I spoke
with a copy service hired by the receiver explaining specifically what
material was requested. The receiver refused to produce the material they
had promised to produce. There were several exchanges with the receiver,
including the receiver’s claim that the failure of their production was my
fault because I failed to contact their copy service. I did contact their copy
service and had a detailed conversation setting out specifically what was
requested (the exact thing which was requested in writing to the receiver). I
discussed the request at a formal ‘meet and confer’ meeting with the
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receiver. Still, the receiver refused to produce what they had promised to
produce, and I was forced to make a formal motion. The withheld material
is necessary to fairly evaluate and respond to claim for unpaid attorney’s
fees.
3. The rules of ethics require that an attorney’s fee be limited to
reasonable fees for the services rendered. An attorney is prohibited from
charging unreasonable fees and fee forfeiture of the entire fee paid the
attorney is the remedy for an attorney’s excess fee demand. As a matter of
law, proof of the reasonable of an attorney’s fee requires expert opinion. I
formally requested from the receiver access to some of Jeff’s funds to hire
an expert on the fees issue. I requested this even in a formal ‘meet and
confer’ session with the receiver. The receiver refused to provide any such
funding. I attempted to find an expert who would work on a contingency
basis, and was unable to find any qualified expert agreeing to do so. As a
matter of law, without an expert’s opinion is not possible at this time to
present evidence that any attorney’s fee is unreasonable. Accordingly, it is
not possible to offer evidence in defense of the attorney’s claims with
respect to that aspect of the claim’s defense. It is my opinion there are
grounds to assert the defense of unreasonable fees on Jeff’s behalf.
4. Proof of Malpractice requires expert opinion. In order to present
evidence of malpractice an expert’s opinion is required. The facts stated
above apply to an expert on malpractice. If Jeff is prohibited from using his
own money to hire an expert, as a matter of law he is unable to present
evidence to establish a defense of malpractice. It is my opinion there are
grounds to assert the defense of malpractice, on Jeff’s behalf.
5. I handle federal appeals, not federal trials. I have never on my own
handled a federal trial, bench or jury, and have always relied upon hired trial
counsel for trials in the federal court. I am not qualified on my own to
appear in federal court and defend multiple claims against multiple teams of
attorneys. I require assistance to handle the organization of the files, tracking
of admission of evidence, preparation and tracking of objections, and many
other aspects of the appearance. If I was up against a single attorney who
also had no support, I think I could manage. It is simply not possible for me
to properly represent Jeff’s interests by myself. My engagement was
express and clear that I was not accepting employment to make any
appearance as trial counsel. An AV rated trial attorney was representing Mr.
Baron at the time I was retained as appellate counsel, but he was ‘fired’ by
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the receiver. From the moment this Court ordered me to be trial counsel for
Jeff, I have been flooded by the receiver and the trustee with a mountain of
paperwork. I have been working well over 65 hours per week on the trial
court issues, for around four months now. As the Court is aware, I have not
been paid because the Court has not allowed Jeff to pay me.
6. Even a minimal evaluation of an attorney’s claim would take a week
of work. Some of the larger claims will take a couple weeks of work to
properly evaluate. Working on my own it will take me over 24 weeks,
approximately half a year, dedicated strictly to that job, to evaluate the
‘claims’ presented. If I were allowed the funds to hire sufficient attorneys
and staff to assist me, the evaluation could be completed in less than a
month.
7. Basic discovery is necessary to properly investigate and respond to the
claims. This includes an opportunity to conduct depositions, and obtain
disclosures from the claimants. An opportunity to serve admissions would
also be helpful. For example, Mr. Ponske at one time swears under oath that
there was no engagement agreement, but at another time swears that there
was an engagement agreement. While some attorneys may be quick on
their feet and have sufficient experience to put on a hearing with live
witnesses without the need to conduct formal discovery, I am not one of
those attorneys. I need to question a witness in a deposition, and then spend
considerable time figuring out how to admit the relevant evidence I desire. I
am not qualified to prove up a foundation ‘from the seat of my pants’. My
ability to put on a hearing is based on hard work and preparation. Without
the opportunity to conduct the underlying discovery I am not qualified to
defend the claims against Jeff. I am not able to ‘shoot from the hip’ and
reliably hit a target. In order to put on a defense at a hearing I must be
allowed to prepare for it. As discussed in this affidavit, I have not been
allowed to prepare a defense in this case.
8. Because this Court has ordered that the undersigned counsel must
work without payment, for the past four months the undersigned has been
forced to work over 65 hours a week on trial court matters reviewing,
researching and responding to a mountain of paperwork generated by two
teams of attorneys billing often over 24 hours a day. The overwhelming
workload without pay, has forced counsel to turn away and defer other work,
and go without material income for four months. Frankly, I am also tired.
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9. It is notable, that the claimant attorneys have been paid nearly two
million dollars while by court order the undersigned has worked on this case
as court ordered trial counsel for months and has been paid no money.
Instead, this court has taken Jeff’s own money, most of his liquid funds, and
paid the receiver who has engaged in a blizzard of work in fabricating claims
against Jeff, and against me personally as his attorney. In addition to being
unpaid, I have been subject to personal insults by the Court’s receiver and
his law partners (for example, accusing me of being “despicable”).
I declare under penalty of perjury that the foregoing is true and correct.
Signed this 28th day of April, 2011, in Dallas, Texas.
/s/ Gary N. Schepps
Gary N. Schepps
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MOTION FOR EXPEDITED HEARING ON EMERGENCY MOTION TO WITHDRAW AS ATTORNEY
OF RECORD FOR JEFFREY BARON – Page 1
Gerrit M. Pronske
State Bar No. 16351640
Rakhee V. Patel
Texas Bar No. 00797213
Christina W. Stephenson
State Bar No. 24049535
PRONSKE & PATEL, P.C.
2200 Ross Avenue, Suite 5350
Dallas, Texas 75201
(214) 658-6500 – Telephone
(214) 658-6509 – Telecopier
Email: gpronske@pronskepatel.com
Email: rpatel@pronskepatel.com
Email: cstephenson@pronskepatel.com
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
In re: §
§
ONDOVA LIMITED COMPANY, § CASE NO. 09-34784-SGJ-11
§
Debtor. § Chapter 11
MOTION FOR EXPEDITED HEARING ON EMERGENCY MOTION
TO WITHDRAW AS ATTORNEY OF RECORD FOR JEFFREY BARON
TO THE HONORABLE STACEY G. C. JERNIGAN,
UNITED STATES BANKRUPTCY JUDGE:
Pronske & Patel, P.C. (“PronskePatel”), pursuant to Section 105 of the United States
Bankruptcy Code, 11 U.S.C. §§ 101 et. seq. (the “Bankruptcy Code”), seeks an order from the
Court setting an expedited hearing on Emergency Motion to Withdraw as Attorney of Record for
Jeffrey Baron [Docket No. 419] (the “Motion to Withdraw”). In support of this Motion,
PronskePatel respectfully represents as follows:
I. JURISDICTION AND VENUE
1. The Court has jurisdiction over the Motion pursuant to 28 U.S.C. §§ 157 and
1334(b). This matter is a core proceeding and this Motion is proper in this district pursuant to 28
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MOTION FOR EXPEDITED HEARING ON EMERGENCY MOTION TO WITHDRAW AS ATTORNEY
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U.S.C. §§ 1408 and 1409.
2. The statutory basis for relief requested herein is Section 105 of the Bankruptcy Code.
II. BACKGROUND
3. On July 27, 2009 (the “Petition Date”), the Debtor filed for bankruptcy protection
under chapter 11 of title 11 of the Bankruptcy Code.
4. On September 17, 2009, the Court entered an order approving the appointment of a
chapter 11 trustee (Docket No. 98).
III. RELIEF REQUESTED
5. As more fully set forth in the Motion to Withdraw, PronskePatel hereby seeks
formal withdrawal as attorneys of record for Jeffrey Baron in the above-referenced bankruptcy
action.
6. Expedited consideration of the Motion to Withdraw is warranted by the
impending time-sensitive issues in this case. Upon information and belief, PronskePatel has
recently learned that Mr. Baron intends to transfer assets to an offshore entity over which U.S.
Courts will not have jurisdiction, in order to hide those assets from legitimate creditors. Upon
information and belief, Mr. Baron will be transferring such assets around September 15, 2010.
In order to pursue state court remedies against such assets and to comply with all ethical
obligations, PronskePatel must withdraw as counsel of record for Mr. Baron by September 15,
2010. Thus, PronskePatel must respectfully request that the Court grant relief on an expedited
basis, so that PronskePatel may withdraw prior to the transfer of assets by Mr. Baron.
Accordingly, PronskePatel respectfully requests a hearing on the Motion to Withdraw on an
expedited basis, on or before September 15, 2010. Specifically, PronskePatel requests that this
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matter be set before or at the same time as the expedited status conference currently set in this
case on September 15, 2010 at 1:30 p.m. [Docket No. 22].
7. PronskePatel has recently learned that Baron intends to hide his assets offshore as
early as September 15, 2010. Thus, the hearing will need to move forward expeditiously to
prevent Mr. Baron’s unlawful activities.
8. Notice of the proposed emergency hearing will be provided to the Trustee, Mr.
Baron, counsel for Mr. Baron, and all parties requesting notice.
WHEREFORE, PREMISES CONSIDERED, PronskePatel respectfully requests the
Court enter an order expediting the hearing on the Motion to Withdraw and granting such other
and further relief, whether in law or in equity, as the Court may deem proper.
Dated: September 9, 2010 Respectfully submitted
By: /s/ Gerrit M. Pronske___
_
Gerrit M. Pronske
Texas Bar No. 16351640
Rakhee V. Patel
Texas Bar No. 00797213
Christina W. Stephenson
Texas Bar No. 24049535
PRONSKE & PATEL, P.C.
2200 Ross Avenue, Suite 5350
Dallas, Texas 75201
Telephone: 214.658.6500
Facsimile: 214.658.6509
Email: gpronske@pronskepatel.com
Email: rpatel@pronskepatel.com
Email: cstephenson@pronskepatel.com
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MOTION FOR EXPEDITED HEARING ON EMERGENCY MOTION TO WITHDRAW AS ATTORNEY
OF RECORD FOR JEFFREY BARON – Page 4
CERTIFICATE OF CONFERENCE
I, the undersigned, hereby certify that on September 8, 2010 I conferred with Gary Lyon,
counsel for Mr. Baron, regarding the relief requested in the Motion. Mr. Lyon indicated that Mr.
Baron is unopposed to the expedited setting. I further certify that on September 9, 2010, I
conferred with Raymond Urbanik, counsel for the Trustee, regarding the relief requested, and
Mr. Urbanik indicated that he is unopposed to the expedited setting.
/s/ _Gerrit M. Pronske______
Gerrit M. Pronske
CERTIFICATE OF SERVICE
I, the undersigned, hereby certify that on September 9, 2010 I caused to be served the
foregoing pleading upon all parties registered to receive electronic notice via the Court’s
electronic transmission facilities.
/s/ _Gerrit M. Pronske______
Gerrit M. Pronske
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AFFIDAVIT OF JEFFREY BARON - Page 1
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., )
MANILA INDUSTRIES, INC., and )
MUNISH KRISHAN, )
Plaintiffs, )
)
vs. ) Civil Action No. 3-09CV0988-F
)
JEFFREY BARON, and )
ONDOVA LIMITED COMPANY, )
Defendants. )
DECLARATION OF JEFFREY BARON
1. My name is Jeffrey Baron. I am a defendant in the above entitled and
numbered cause. I am competent to make this declaration. The facts stated
in this declaration are within my personal knowledge and are true and
correct. I have personal knowledge of the stated facts, which I learned as the
result of being subjected to the facts and events stated herein.
2. The attached Exhibits are true and correct copies of emails, which
were sent by the attorneys (Gary Lyon and Stan Broome) as indicated in the
email.
I declare under penalty of perjury that the foregoing is true and correct.
Signed this 3rd day of May, 2011, in Dallas, Texas.
/s/ Jeffrey Baron
Jeffrey Baron
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From: Stan Broome [mailto:SBroome@broomelegal.com]
Sent: Friday, October 08, 2010 1:57 PM
To: Jeff Baron; Martin Thomas; J cox
Subject: Fwd: PhoneCards.com
Sent from my iPhone
Begin forwarded message:
From: "Gary G. Lyon" <glyon.attorney@gmail.com
>
Date: October 8, 2010 1:50:40 PM CDT
To: "'Stan Broome'" <SBroome@broomelegal.com
>
Subject: RE: PhoneCards.com
Stan,
I just wanted you to have a copy of this. I will see if I can work this one
out with Jeff and Mark. If it comes to litigation, I will then bring you
in. This way Jeff can't keep yelling about attorney fees. If I handle this
one then it lets you stay around as needed in litigation. I am $40 an hour
(yeah, I know) so we can get some more bang for the buck and it frees you to
concentrate on the Gerrit matter.
I am sorry I didn't clarify myself in the previous email.
Gary
-----Original Message-----
From: Stan Broome [mailto:SBroome@broomelegal.com]
Sent: Friday, October 08, 2010 1:38 PM
To: Gary G. Lyon
Subject: Re: PhoneCards.com
Ok. I will respond. Please direct him to me for any further communications
on fee issues.
Thx
Stan
Sent from my iPhone
On Oct 8, 2010, at 1:31 PM, "Gary G. Lyon" <glyon.attorney@gmail.com
> wrote:
Stan,
I am forwarding this to you so that you won't be "surprised" if Jeff
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disputes this bill. I don't really know that Jeff owes the firm any
additional monies as the case settled without going to trial. If Mark is
arguing that he had a contingency fee agreement, I don't know that a
settlement would entitle him to be paid under that contract.
Anyway, just keep this for later use if necessary.
Gary
Gary G. Lyon
Attorney at Law
Post Office Box 1227
Anna, TX 75409
972.977.7221
Fax 214.831.0411
Email: glyon.attorney@gmail.com
Skype: gary.g.lyon
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This electronic message contains information, from the law firm of Gary G.
Lyon, Attorney at Law, which may be privileged and confidential. The
information is intended for the use of the addressee(s) only. If you are
not
an addressee, note that any disclosure, copying, distribution, or use of
the
contents of this message is prohibited. If you have received this e-mail
in
error, please contact me at the number or e-mail listed above.
-----Original Message-----
From: mark taylor [mailto:mark@powerstaylor.com]
Sent: Friday, October 08, 2010 8:43 AM
To: Gary G. Lyon
Subject: PhoneCards.com
Gary:
Our firm is still owed $2,460 on the hourly portion of our fees. As
explained in the attached letter, I have proposed that Mr. Baron pay us an
additional $42,000 to cover the contingency fee portion of our agreement.
Mr. Baron has not yet responded to this letter.
Mark
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No virus found in this incoming message.
Checked by AVG - www.avg.com
Version: 9.0.862 / Virus Database: 271.1.1/3183 - Release Date: 10/07/10
13:34:00
<10.7.10 Baron Correspondence.pdf>
<mark.tiff>
No virus found in this incoming message.
Checked by AVG - www.avg.com
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13:34:00
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From: mark taylor [mailto:mark@powerstaylor.com]
Sent: Thursday, August 26, 2010 4:16 PM
To: Jeff Baron
Subject: Powers Taylor
Jeff:
I know you've got a hundred things on your plate right now, but we have an
invoice that is approaching 60 days old. Could you check on getting both of
our outstanding invoices paid now? We'll probably have a very small bill
that will go out at the first of September, but that should be the last one.
Thanks.
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DECLARATION OF JEFFREY BARON - Page 1
Alan L. Busch
Busch, Ruotolo & Simpson, LLP
100 Crescent Court, Suite 250
Dallas, Texas 75201
Telephone: (214) 855-2880
Facsimile: (214) 855-2871
E-mail: busch@buschllp.com
Mark Stromberg
State Bar No. 19408830
STROMBERG STOCK, PLLC
Two Lincoln Centre
5420 LBJ Freeway, Suite 300
Dallas, Texas 75240
Telephone 972/458-5335
Facsimile 972/770-2156
E-mail: mark@strombergstock.com
Attorneys for Jeffrey Baron, Alleged Debtor
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
IN RE: §
§
JEFFREY BARON, § Bankr. No. 12-37921-SGJ
§
Alleged Debtor. § Hearing: Feb. 13, 2013 @ 1:30 p.m.
____________________________________________________________________________________________
DECLARATION OF JEFFREY BARON
STATE OF TEXAS §
COUNTY OF DALLAS §
1. My name is Jeffrey Baron. I am over twenty-one years of age, am of
sound mind, and full capable of making and competent to make this declaration. I
have never been convicted of a crime involving moral turpitude. All of the facts set
forth herein are within my personal knowledge, obtained as the result of witnessing
the facts and experiencing the events stated herein, and are true and correct.
2. Each of the disputes discussed below existed prior to the filing of the
petition for involuntary bankruptcy in this case, and still exist today. The Fifth
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DECLARATION OF JEFFREY BARON - Page 2
Circuit, as I understand the opinion, held that a receivership was the improper way to
resolve these disputes. I want to resolve the disputes, but I do not want to do it in an
involuntary bankruptcy proceeding.
Hall
3. I dispute Mr. Hall's claim for fees and Mr. Hall knows this. The
matter is pending in state court. Prior to making his claims, I paid him everything I
was obligated to pay him. The contract marked exhibit 6 (D 6) to my summary
judgment response is a true and accurate copy of my contract with Hall. His
claim, which I deny, is that I made an oral agreement with him to increase the amount
of his contract for the last month, or to pay him an extra $5,000.00 for his last month.
He was paid in full and I owe him nothing. My dispute as to the validity and amount
of Mr. Hall's claim for fees is bona fide. To the best of my knowledge, there is
currently a disputed claim lawsuit pending in the JP court over Hall’s claim.
Lyon
4. I dispute Mr. Lyon's claim for fees and he knows this. Lyon's billing
rate was $40/hour. He was paid for his work as agreed and I never agreed to pay him
$300/hour and Lyon never billed me at that rate while he was working for me. His
$300/hour bills are fictitious, created after he was no longer working for me.
Moreover, Lyon settled his dispute in a written accord and satisfaction entered into to
resolve his fee dispute. I complied with, relied on, and paid money to Lyon under the
written accord and satisfaction agreement. My dispute as to the validity and amount
of Mr. Lyon's claim for fees is bona fide, based on the objective facts and rules of
law. Lyon violated his most basic duties, including duty of candor and loyalty, and
has made false representations regarding his relationship with me and his fee. After
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DECLARATION OF JEFFREY BARON - Page 3
Mr. Lyon had been performing legal work for me in Texas, I was informed that it was
illegal for Mr. Lyon to do so because he is not licensed by the state to practice law
here.
5. Mr. Lyon's statements about my financial affairs are groundless. Mr.
Lyon has no personal knowledge of my financial condition, and he has no idea what
financial obligations I have, or whether or not they were paid. I have not had a
substantive conversation with Mr. Lyon at all, much less concerning my financial
condition in years.
6. I am paying my undisputed debts as they come due. Currently I am
paying the following bills: My monthly electric bill, the monthly bill for my
apartment, my dentist, and the bills for my medications and medical treatment. I also
have paid my lawyer’s bill involving tens of thousands of dollars. Notably, over the
years I have paid my bills, pursuant to my legal obligations. This is demonstrated by
Mr. Hall, who has testified that I paid him the monthly fee, for every month, pursuant
to the terms of his written contract. The only bills that have not been paid are for
disputed debts, for example, Hall’s disputed fee claim for an additional $5,000.00
beyond the amount agreed to in our written contract.
7. This is also demonstrated by Mr. Taylor’s affidavit, in which he
admits he was paid, in full, his bill that was due pursuant to the written terms of our
contract. The fee that I did not pay him, was the disputed fee that Mr. Taylor admits
is not called for by the written terms of our agreement. Thus, I pay my undisputed
debts as they come due, and have done so for years. It is only the disputed
debts that
have not been paid.
8. I do not have access to my documents and records, which have been
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DECLARATION OF JEFFREY BARON - Page 4
seized by the receiver. Without those documents I am unable to provide more detail,
but, my attorneys have been paid literally millions of dollars over the past few years.
Powers/Taylor
9. I dispute the Taylor claim for fees and he knows this. I have a written
agreement with Mr. Taylor and he was paid every dime called for in the agreement.
There is a contingency condition to the agreement, but the contingency was not met
because Mr. Taylor failed to obtain a positive result on the case he handled. At the
time I entered the settlement Taylor never informed me that any contingency would
be due him based on the settlement. I would not have agreed to such an arrangement
if he had attempted to make such a claim at the time. At the time, he told me that no
contingency was due, and sent me a written email confirming that only a small bill
would be sent, and that would be the last one. (A true and accurate text of Taylor’s
email appears below.) Taylor had a retainer from me sufficient to cover all of his
'oustanding' inovices, and was paid in full
pursuant to the terms of his contract.
Taylor admits he was paid in full for his hourly work, and admits that it is impossible
for him to show how he is entitled to any money under the express, written
contingency fee provision the he drafted.
10. Taylor was paid approximately $100,000.00 and to the best of my
knowledge, owes a refund of the unused portion of the retainer he was paid, to the
best of my recollection, around $10,000.00 or so. Taylor has not refunded or returned
the retainer, in violation of the express terms of our written agreement. To be clear,
Taylor was paid in full for all of the fees due Taylor pursuant to our written fee
agreement.
11. Instead of obtaining a recovery
for my IRA that owns phonecards.com,
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DECLARATION OF JEFFREY BARON - Page 5
Taylor’s work resulted in both the $200,000+ payment, which the defendant had
previously agreed to pay and many months of revenue from the domain name asset,
being lost. To be clear, Taylor’s work resulted in a substantial loss for my IRA, not a
recovery.
12. After the settlement, Taylor sent me an email that stated as follows:
From: mark taylor [mailto:mark@powerstaylor.com]
Sent: Thursday, August 26, 2010 4:16 PM
To: Jeff Baron
Subject: Powers Taylor
Jeff:
I know you've got a hundred things on your plate right now, but we have an
invoice that is approaching 60 days old. Could you check on getting both of
our outstanding invoices paid now? We'll probably have a very small bill
that will go out at the first of September, but that should be the last one.
Thanks.
13. My dispute as to the validity and amount of Mr. Taylor's claim for fees
is bona fide. I note for the court, in case the court is not aware, the receiver seized
my documents and records, and the records and evidence of my attorney representing
me in these fee disputes, so I am unable to look a those documents at this time, to
refresh my recollection and provide more exact information. I am not able to fully
defend myself and provide more evidence unless I am allowed to have all the
documents and records that were taken by the receiver, and sufficient time to organize
them and review them. This applies to all of the disputed fee claims discussed in this
declaration.
Schurig
14. I dispute Ms. Schurig's claim for fees and she knows this. Schurig’s
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DECLARATION OF JEFFREY BARON - Page 6
affidavit states she received well over a million dollars in fees
and claims that I owe
her under $1,400.00. However, Schurig has claimed against me nearly a hundred fold
that in her petition in this case, making a claiming for over $90,000.00.
15. I sent Ms. Schurig over $2 Million to hold in trust, which funds have
never been reasonably or rationally accounted for by Ms. Schurig. My attorneys have
made repeated requests for an accounting and she has never provided any
documentation, that I am aware of, accounting for the money in any reasonable or
rational way. Also she was sent hundreds of thousands of dollars in trust to pay my
taxes, and upon information and belief, she has not done so, but has used the money
for unauthorized uses, upon belief, taking the money. If allowed to take depositions, I
could prove this by the testimony of attorneys involved in sending her the money, and
by her banking records. My dispute as to the validity and amount of Ms. Schurig's
claim for fees is bona fide.
16. I dispute that I owe Schurig any money. The district judge determined
that she overcharged me and was billing me at an unreasonable rate. She is also
charging me money in her billing for work prior to the date of the retainer contract in
her affidavit. When her bill is adjusted to reflect the maximum reasonable rate the
district judge determined was reasonable for her to charge, Schurig owes me a refund.
I would also like her to return my $2 Million Dollars, and the hundreds of thousands
dollars she was sent to hold in trust for taxes. In the conduct discussed above,
Schurig breached her fiduciary duties to me, and has no right to collect any fee.
Pacione
17. I dispute Mr. Pacione's claim for fees and he knows this.
18. The following is the true and accurate text of a letter Pacione received
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DECLARATION OF JEFFREY BARON - Page 7
from me on February 9, 2010 setting out in writing the agreed work product he was to
provide me as part of his work for me in February:
From: jeffbaron1@gmail.com [mailto:jeffbaron1@gmail.com]
Sent: Tuesday, February 09, 2010 3:28 PM
To: 'David Pacione'
Subject: RE: tasks with deadlines
Annotated Timeline w/ documents 2/18/10
Bankruptcy Motions filed (objection to claims and Payment of special Master Fees)
Week of 2/8/10
Motion to Disqualify 2/18/10
Trademark Memo 2/19/10
Breach of Fiduciary Duty Memo 2/19/10
Depo Outline (Munish, Manish, Jill) - After mediation
19. Pacione failed to do all of the above listed work and provide me the
work product. His doing that work was a prerequisite to my obligation to pay him. I
asked him to sign a contract and told him that if he did not complete the assignments
listed, and return the work product to me by the 'deadline', that there was no payment
obligation due until a written contract was signed-- and he agreed. He represented that
he was doing all the work, but then, failed to do it and provide me the work product.
20. The written terms in the written contract Pacione attached to his
summary judgment affidavit make clear that my agreement to pay him was based on
his providing work product to me. Pacione understood that my agreement to pay him
any money was based on the terms of the written contract, but Pacione did not sign
the contact with me because he, based on what he said, was not sure he wanted to
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DECLARATION OF JEFFREY BARON - Page 8
take responsibility for handling the cases. I asked him to do specific things, and
provide work product to me. He provided me effectually no work product. I asked
him provide me a detailed time statement and he provided only a 'block' statement of
his time and demanded money. While Pacione may expect me to ‘take his work for
it’ and pay him a fixed rate of money, that was not our agreement. We had set,
written work product that he was supposed to provide, and deadlines for providing it.
The first thing was a “Annotated Timeline w/ documents 2/18/10”. He failed to
provide that. My agreement to pay Pacione any fee was clearly and expressly based
on his providing the work product. The was stated expressly in our conversations. I
never agreed to pay Pacione simply to do work, or do whatever he wanted to do, or
anything like that. I agreed to pay for Pacione providing me specific work product
that was listed, in writing. Pacione failed to perform.
21. Again, Pacione had a discreet list of tasks with deadlines. He did not
do the work, and is not entitled to be paid. I offered to pay him based on the work
product he provided to me, for example the Annotated Timeline. If he would have
provided that work product to me, I would have happily paid for it. My attorneys
were paid millions of dollars in fees. For example, I paid Hall over $100,000.00.
Pacione did not provide me the work that I agreed to pay him for.
22. Pacione sued me in the district court, the case is disputed, and had
been dismissed against Pacione at one point. My dispute as to the validity and
amount of Mr. Pacione's claim for fees is bona fide.
Garrey
23. I dispute Mr. Garrey's claim for fees and he knows this.
24. He was supposed to start working but did not generally show up for
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DECLARATION OF JEFFREY BARON - Page 9
work, and told me he was not going to work for me after about 10 days when he
demanded a large payment and I refused to pay him.
25. I did not defraud Garrey in any way. Everything I ever said to Garrey
was true and accurate. His claims are fabricated. I owe him no money. He did not
perform the work he claims to have performed. Pursuant to my agreement with
Garrey, the total amount I was obligated to pay him in return for three months work,
was a total of $375.00. Garrey admits this in his summary judgment affidavit (at
about page 9 or 10) and includes the “breakdown of payments” that had been agreed
to regarding my obligations to pay him for working three months. It can be clearly
seen from his affidavit that my statements are true. Garrey filed a lawsuit against me
and demand $1 Million Dollars for his alleged 14 days of ‘work’.
26. In his affidavit for summary judgment Garrey claims, for example, that
he performed work for the Village Trust, preparing and filing a special appearance for
them. His statements are false and completely untrue. Garrey attempted to directly
contact the trustee of the Village trust and solicit work from him. The Trustee
rejected Garrey’s offer, and Garrey sent a letter that proves Garrey never did any
work for the Trust, stating, “I have not been asked or retained to provide any legal
services for The Trust.” That is obviously, opposite what Garrey has sworn to in his
false claim. Garrey’s claim against me is false, it is untrue. His lawsuit for his
disputed claim is pending in state court.
27. The following is the true and accurate text of an email that I was
forwarded which was sent to the trustee of the village trust from Garrey:
From: Bob Garrey [mailto:bgarrey@gmail.com]
Sent: Thursday, November 11, 2010 9:07 AM
To: Tine Faasili Ponia
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DECLARATION OF JEFFREY BARON - Page 10
Cc: ; Brian Mason
Subject: Re: $58,000 owed to The Village Trust
Thank you for the response Tine.
This email will confirm that the Village Trust: 1) will be requesting the
funds due under the Global Settlement Agreement; and 2) will secure separate
counsel for the F&F lawsuit.
For purposes of clarity only, this will further confirm The Village Trust
does not require or expect any legal services from me, and I have not been
asked or retained to provide any legal services for The Trust.
Best regards,
Bob Garrey
Sent from my iPhone
On Nov 10, 2010, at 10:01 PM, "Tine Faasili Ponia"
wrote:
> Dear Bob
>
> Thank you for your email.
>
> If the trust is indeed entitled under the Settlement Agreement to
> receive the $58,000 upon request, we would prefer to request the
> release of the money from the bankruptcy trustee directly ourselves.
>
> With regards to the suit filed by Friedman & Feiger, thank you for
> your offer of assistance but the trustee is of the view that the trust
> must engage independent counsel.
>
> Kind regards
>
> Tine Faasili Ponia
> GENERAL COUNSEL
> SOUTHPAC TRUST LIMITED
> Phone (682) 20 514
> Facsimile (682) 20 667
> USA Free Fax 1-800-863-0056
> Website www.southpacgroup.com
>
> ==>
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This communication (including any files or text attached to it) is
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> confidential and may also be privileged. It is intended only for the
> recipient(s) named above.
> If you are not an intended recipient, you must not read, copy, use or
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>
> -----Original Message-----
> From: Bob Garrey [mailto:bgarrey@gmail.com]
> Sent: Tuesday, 9 November 2010 6:18 p.m.
> To: Brian Mason
> Cc: Jeff Baron; Bob Garrey
> Subject: $58,000 owed to The Village Trust
>
> Brian,
> I am assisting Jeff Baron on several matters. One of those matters is
> the release of more than $58,000 owed to The Village Trust pursuant to
> the Global Settlement Agreement relating to Pokerstar.com Revenues.
> With your approval we would like to request the Bankruptcy Trustee
> release the funds to the Village Trust. Please let me know if this is
> acceptable to you.
>
> I am also aware of your potential need for counsel to file a Special
> Appearance in the Texas State Court lawsuit filed by Friedman &
> Feiger. If I can assist you in any manner, please let me know.
>
> Best regards,
> Bob Garrey
>
> Sent from my iPhone
28. My dispute as to the validity and amount of Mr. Garrey's claim for
fees is bona fide. In order to make very clear, Mr. Garrey is lying. That should be
clear from his sworn affidavit. He says he stopped working before November 14,
2010. He says he was hired to find a strategy to remove the receiver and his attorney.
The motion to appoint the receiver was not filed until November 24, 2010, after
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Garrey admits he was not working for me. Yet, Garrey swears he was hired to find a
strategy to remove the receiver, and that he preformed that service. His claim is a
completely false.
Ferguson
29. I dispute Mr. Ferguson's claim for fees and he knows this. Ferguson
never provided a time log, although, to the best of my recollection, I repeatedly
requested it.
30. I had an agreement with Ferguson and paid him on it in full. Beyond
that, Ferguson agreed that he would not do more than 10 hours work without express
written permission. He did not provide me with any work reports a beyond what he
was paid for. To the best of my recollection, I never discussed with Ferguson my
personal financial situation or how much money I had or did not have personally. I
never made any false statement to Ferguson.
31. The following is the true and accurate text of an email sent by Dean
Feruson on August 25, 2010:
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Return-Path: <dwferg2003dm@yahoo.com>
From: "dean ferguson" <dwferg2003dm@yahoo.com>
To: <jeffbaron1@gmail.com>,
"Gary G. Lyon" <glyon.attorney@gmail.com>,
<jamesmeckels@gmail.com>
Subject: Update as to My role
Date: Wed, 25 Aug 2010 23:44:27 -0600
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After lengthy discussions with Jeff over the last couple of days, and having
taken stock of my workload, the issues facing Jeff, the parties' respective
positions and the needs of our mutual client, Jeff Baron, I have concluded
that I must immediately, substantially limit my participation as counsel for
Jeff. Accordingly, I am withdrawing immediately as counsel. I will,
however, agree to begin work as a consulting bankruptcy attorney, with no
obligation to work or provide any services whatsoever. If Jeff requests
that I perform certain tasks from time to time, and I in my sole discretion
agree to do so, he has agreed to compensate me for my work at a discounted
rate of $300/hour. Absent further written agreement, it will be presumed
that I will not work or bill in excess of 10 (ten) hours per month. I will
assist in the transition to new bankruptcy counsel and shall be available at
my convenience and in my sole and absolute discretion to James, Gary or any
other counsel for Jeff (and, if appropriate in my opinion, entities such as
Quasar) as I may elect. I shall have no role in any proceedings involving
Gerrit Pronske except as I, in my sole discretion, shall choose, and in no
event shall I serve as or be deemed to be Jeff's counsel in any such
proceedings. I agree that, to the extent I provide consulting advice, I
will maintain client confidences. I also agree not to accept representation
of any other party in the Ondova case and acknowledge that in my role as
consultant, and while so employed, I am not and will not accept employment
adverse to Jeff. In consideration of past services rendered, my willingness
to serve as consulting bankruptcy counsel under the limitations expressed
herein and other good and valuable consideration, Jeff has agreed to pay me,
as soon as reasonably practical, the sum of $15,000.00 (Earned Fee Payment),
which is deemed earned and immediately due and payable without further
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action. My agreement to participate in any fashion is premised in large part
upon there being an ongoing "team" consisting of Gary Lyon, James Eckels and
a "player to be named later" ("PTBNL" - sorry, couldn't resist a bad
baseball pun, give the ranger's BK situation). Jeff has agreed that he will
timely compensate all team members in a fashion mutually acceptable to them
(and in which I have no further stake). Until and unless I receive payment
of the Earned Fee Payment, I shall have no obligation to take any action
whatsoever, including any action as a consultant hereunder. If I choose in
my sole discretion to provide services before the payment is received, the
fact that I choose to render services shall in no way be deemed a commitment
to provide any further services. Notwithstanding any other term or
condition of this or any other agreement, if in my sole discretion I render
any such services before receipt of the Earned Fee Payment, Jeff agrees to
pay me for the services at the agreed upon consulting rate, separate and
apart from the Earned Fee Payment. Jeff and I intend for it to be
absolutely clear that I may withdraw from and terminate my role as
consulting counsel at any time, for any reason or no reason, in my sole and
absolute discretion, provided only that to the extent I undertake a specific
task or provide a particular service, I shall have the duty of ordinary care
in rendering such service or accomplishing the task, and in no event shall
there arise from the fact that I undertook the task or service any special,
extraordinary or fiduciary obligation.
Sorry for the long winded exposition, but I think it is important to
lay the predicate for this relationship so that there is no deviation from
expectations. My willingness to take any action whatsoever in the nature of
working for Jeff is conditioned upon the idea that he is going to find other
counsel to work with Gary to handle the bankruptcy aspects of the case. I
am willing, subject to the foregoing restrictions, to "download" my general
thoughts and specific knowledge of the case and relevant facts, to assist in
transition, and to provide limited advice, if requested and desired by Gary
and/or replacement counsel. I think I can convey to replacement counsel in
a few short hours a pretty good idea of what Gerrit contemplated, where he
and Gary were headed, what it would take to get an agreement with Ray, the
concept of the Section 365 based plan, etc. and alternatives to the plan.
As to when I shall announce my withdrawal and new role, that depends
upon events. Here's what I would like to see - (1) in the morning, James
and I need to talk. I think we can reach a quick agreement with Ray
accepting the terms of the interim agreement with a few minor, but important
changes: (a) need to add a provision stating that entering into the interim
agreement has no precedential effect, not admissible as evidence of
reasonableness of any amount, all rights expressly preserved; (b) while we
will agree that Joey has to be satisfactorily resolved, it is not
appropriate to specify in this agreement because of potential effect on
litigation. We will enter into side agreement that he must be
satisfactorily resolved (to his and our satisfaction - if we reach a deal
with him, Ray can't say "that's not good enough - Joey is a big boy); (2)
Assuming we can sign off on the interim agreement, we enter into agreement
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postponing September 8 hearing, extending answer deadline to late September
or October, and postpone Jeff's deposition. I'd like for Gary to be the
point for any deposition discussions, but since he'll be at parkland
tomorrow, James and I will ask to move depo and see if the desire to take it
is limited to price issues or if this is a fishing expedition; (3) Assuming
we postpone all Ray related deadlines, Jeff can focus on finding new BK
primary counsel and selecting new trustee. James can work with me to flesh
out the Schnabel deal, determine feasibility of Fabulous.com, address
technical issues. (4) Somehow, Gerrit needs to be postponed and convinced
to hold off, even if only briefly. Gary - you are going to have to take a
leadership role on this until Jeff can get new counsel on board, even if
that counsel is separate from BK counsel (how many lawyers does it take to
screw in a lightbulb? Obviously, two, but it has to be a big lightbulb, and
I'm not sure how they get in it to screw). I am out, James can't do it.
Maybe you can start by suggesting that Gerrit really shouldn't sue while he
is still counsel of record in the BK. Maybe he could withdraw and You could
tell him Jeff is getting new counsel but will make a cash plus mediation
offer Monday or Tuesday?
Good night. d.
Dean W. Ferguson
Kingwood, Texas 77345
713.834.2399
dwferg2003dm@yahoo.com
This e-mail, and any attachments thereto, is intended only for use by the
addressee(s) named herein and may contain legally privileged and/or
confidential information. If you are not the intended recipient of this
e-mail, you are hereby notified that any dissemination, distribution or
copying of this e-mail, and any attachments thereto, is strictly prohibited.
If you have received this e-mail in error, please notify me by replying to
this message and permanently delete the original and any copy of this e-mail
and any printout thereof.
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13:34:00
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32. My dispute as to the validity and amount of Mr. Ferguson's claim for
fees is bona fide, based on the objective facts and rules of law.
Pronske
33. I dispute Mr. Pronske's claim for fees and he knows this. On January
4, 2011, Pronske admitted that (1) his engagement was negotiated by Schurig and not
by me, (2) the agreement was that he would be paid a fixed amount up front, seventy-
five thousand dollars, and that he would bill against that pre-paid retainer. Pronske
admitted that he received the $75,000.00.
34. On or about September 27, 2010 Pronske admitted in his counterclaim
filed against me that I did not represent to him that I was going to personally pay for
his Firm's services. Rather, Pronske stated that the retainer was due from the Trust.
35. To be clear, Pronske did a lot of work. He worked long hours. He has
also admitted that he did not negotiate an agreement with me to pay him. At the
beginning, Pronske agreed to work for Ondova. On September 1, 2009, (see Doc 63
in the district court case). Friedman brought him in.
37. After I got to know Pronske, I believed that he was my friend and
really cared about me and the case. When he paid attention to the case he was
helpful. Prior to demanding hundreds of thousands of dollars, Pronske did not
provide me with work reports or bills, or notify me that he had used up the retainer.
38. On or about July 2010, Pronske demanded that I pay him for his prior
work. Prior to that time he did not send me any demand or notice for those fees. Less
than a week after he request (for the first time) I pay him money (beyond the
$75,000.00 he had been paid), Pronske said he was not going to do any more work for
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me. When I tried to have a new attorney substitute in (because Pronske was refusing
to handle the case), Pronske refused to sign off on the substitution unless I first paid
him the fees he demanded.
39. I had no intention or plan to move any of my assets in September
2010, and Pronske's public, on-the-record representations that I did are completely
false and a breach of fiduciary duty which led to the improper imposition of a
receivership over me, causing me direct and continuing harm. I never told Pronske
that I had any intention of secreting or transferring offshore my personal assets.
Pronske threatened me that if I did not immediately pay him all the money he wanted,
he would harshly retaliate against me, and recruit assistance from other attorneys.
40. My dispute as to the validity and amount of Mr. Pronske's claim for
fees is bona fide.
Summary
41. Each of the petitioners, in their specific circumstances have sought
excessive fees. The district judge found that Pronske's fees and Schurig's fees billed
at over $400.00 per hour were not reasonable for the work performed. Hall and
Taylor are seeking fees that they are not entitled to under their contract and they were
paid every dime they were owed under their contract. Hall was paid $10,000.00
beyond what he was owed under the express terms of our written agreement. Taylor
was paid in full, and to the best of my knowledge, there is a retainer balance that
should have been returned to me when his representation ended. Garrey and Pacione
are seeking fees for work they did not perform. Lyon is seeking fees at a rate almost
ten times higher than he agreed to and at which rate ($40/hour) he solicited work be
given to him. Ferguson is seeking more than twenty times the maximum possible fee
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he could be owed based on his own written letter, assuming he did the work he says.
He has not provided any billing statements to support his claim.
42. The attorneys have also violated their fiduciary duties by violating the
Texas rules of professional responsibility, including the prohibition for seeking an
excessive, improper, or unreasonable fees. I have been substantially damaged by
their wrongful conduct, and without their participation, the receivership would have
been stayed or vacated, and the petition for involuntary bankruptcy would not have
been filed. I have been under an unauthorized receivership for over two years and
have been substantially damaged by the attorneys’ actions. One of my former
attorneys.
I declare under penalty of perjury that the foregoing is true and correct.
Signed this 8th day of February, 2013, in Dallas, Texas.
/s/ Jeffrey Baron
Jeffrey Baron
Respectfully submitted,
STROMBERG STOCK, PLLC
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By: /s/ Mark Stromberg
Mark Stromberg
State Bar No. 19408830
CERTIFICATE OF SERVICE
I hereby certify that on February 8, 2013 a true and correct copy of the foregoing
document was sent by email to Lisa Lambert, Counsel for the United States Trustee; Gerrit
Pronske, Counsel for the Petitioning Creditors, was served upon all persons identified below by
regular mail, postage prepaid, and to all other persons requesting notices via the ECF system.
Gerrit M. Pronske Shurig, Jetel Beckett Tackett
PRONSKE & PATEL, P. C. 100 Congress Ave., Suite 5350
2200 Ross Ave., Suite 5350 Austin, Texas 78701
Dallas, Texas 75201 Email: mroberts@morganadler.com
Dean Ferguson Jeffrey Hall
4715 Breezy Point Drive 8150 N. Central Expy., Suite 1575
Kingwood, Texas 77345 Dallas, Texas 75206
Email: dwferg2003dm@yahoo.com
Email: jeff@powerstaylor.com
Gary G. Lyon David Pacione
The Willingham Law Firm Law Offices of Brian J. Judis
6401 W. Eldorado Parkway, Suite 203 700 N. Pearl St., Suite 425
McKinney, Texas 75070 Dallas, Texas 75201
Email: glyon.attorney@gmail.com
Email: david.pacione@CNA.com
Robert Garrey Sidney B. Chesnin
1201 Elm Street, Suite 5200 4841 Tremont, Suite 9
Dallas, Texas 75270 Dallas, Texas 75246
Email: bgarrey@gmail.com
Email: schesnin@hotmail.com
Darrell W. Cook and Stephen W. Davis Lisa L. Lambert and Nancy Resnick
Darrell W. Cook & Associates Office of the United States Trustee
One Meadows Building 1100 Commerce St., Room 976
5005 Greenville Ave., Suite 200 Dallas, Texas 75242
Dallas, Texas 75206 Email: lisa.l.lambert@usdoj.gov
Email: all@attorneycook.com Email: nancy.s.resnick@usdoj.gov
/s/ Mark Stromberg
Mark Stromberg
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E
XHIBIT D 9
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